ZURICH, Feb 13 (Reuters) – Switzerland’s annual inflation rate stayed at 0.1% in January, government data showed on Friday, the bottom end of the Swiss National Bank’s target range.
The increase in consumer prices was in line with the forecast of analysts polled by Reuters and was the same rate as in December.
The SNB declined to comment on the figure, which was at the bottom end of its 0-2% target range, which it defines as price stability.
EFG Bank economist GianLuigi Mandruzzato said the data put little pressure on the central bank to change policy, highlighting how core inflation, which excludes price changes of fresh and seasonal products, energy and fuel, remained at 0.5%.
Still, the SNB will be closely watching moves in the Swiss franc, whose recent appreciation could push down prices of imported goods, he said.
“The SNB could start referring to the franc as strongly valued, to signal they are not happy and are monitoring the situation,” Mandruzzato said.
“It does not seem they have intervened in the forex markets to weaken the franc, but that could change.”
Previously the SNB has said it was prepared to let inflation fall below the target on a temporary basis, and was prepared to tolerate a short period of negative inflation because it looked at inflation over the medium term.
SNB Chairman Martin Schlegel said this month that a combination of low inflation and the central bank’s current policy rate of 0% put it in a tight spot.
Month-on-month, Swiss consumer prices fell by 0.1%, due to cheaper electricity, clothing and footwear.
(Reporting by John Revill; Editing by Susan Fenton)
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